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Author Topic: House Buying  (Read 16540 times)

Lennys Tap

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Re: House Buying
« Reply #175 on: August 12, 2022, 04:18:25 PM »
Glad to see you're predictions played out to your benefit.  Can I borrow a buck?

Sure.

rocky_warrior

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Re: House Buying
« Reply #176 on: August 12, 2022, 07:02:54 PM »
Sure.

Ah hell.  Keep this up and people will start expecting to be able to access Scoop for free!

wadesworld

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Re: House Buying
« Reply #177 on: August 12, 2022, 07:03:55 PM »
Ah hell.  Keep this up and people will start expecting to be able to access Scoop for free!

You guys are making too many young posters like me entitled. We have it way too easy around here.
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jesmu84

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Re: House Buying
« Reply #178 on: August 12, 2022, 07:20:15 PM »
Yep. My daughter and her husband have a couple of rental properties, and they say some of the best value they get is in the tax treatment of the properties.

Maybe we could use housing not as an investment vehicle?

Spaniel with a Short Tail

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Re: House Buying
« Reply #179 on: August 12, 2022, 09:08:04 PM »
I bought a house in 2007 - just before the real estate crash. When I sold it 11 years later, I made a very modest gain. About 1.5% annual return if you include the commission. I likely would have had to sell at a loss if I had sold it any time within the first five or six years of ownership.

But we loved the house. If I had it all over, I wouldn’t have changed a thing. (I did make a killing on the house I sold to buy the one back in 2007. So that eases the pain a little.)

You gotta live somewhere. I never thought of my house as primarily an investment. It was primarily a place to live. If it grew in value, great. If it didn't, NBD.

Lennys Tap

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Re: House Buying
« Reply #180 on: August 12, 2022, 09:30:07 PM »
You gotta live somewhere. I never thought of my house as primarily an investment. It was primarily a place to live. If it grew in value, great. If it didn't, NBD.

This is (imo) the way to view a home. First and foremost, does it help make your life happier? There’s great value in that. The $ value is really only important on the day you buy and the day you sell. Otherwise it’s noise.

jesmu84

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Re: House Buying
« Reply #181 on: August 12, 2022, 10:27:48 PM »
You gotta live somewhere. I never thought of my house as primarily an investment. It was primarily a place to live. If it grew in value, great. If it didn't, NBD.

Sure.

But that doesn't mean housing isn't used as an investment vehicle by many others. Landlords, investment groups, etc

MU82

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Re: House Buying
« Reply #182 on: August 12, 2022, 10:35:03 PM »
Maybe we could use housing not as an investment vehicle?

Sounds like a good platform for you to run on.
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mu_hilltopper

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Re: House Buying
« Reply #183 on: August 12, 2022, 10:42:47 PM »
Funny/odd closing story.

Last year, we bought a place that's a unit in a resort.  We'd stayed there before, but bought the unit sight unseen, no inspection, cash purchase.  (Everything was fine.)

The funny part was the closing.  Every closing I've ever been a part of .. your hand hurts from signing a thousand documents a million pages long.

I'd previously asked the escrow people we wanted to do a virtual/zoom signing, and that was acknowledged.   June 1st comes and we're waiting for a zoom link that never comes.  Eventually, I called my agent and asked what was going on.   He calls me back and says "oh, you already own it, it closed."    Uh, what now?

"Yeah, there was that 1-page Excel document that had the numbers and you signed it and wired a check.  That's it."    Uh, really?

Later the (now previous) owner calls me and asks "um, did we close today?"  "I'm like 80% sure we did.  Maybe?"

Everything turned out OK, about a week later we got a stack of official looking deed type papers.  Wasn't 100% sure until we got the property tax bill months later.

The Sultan of Semantics

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Re: House Buying
« Reply #184 on: August 13, 2022, 05:10:04 AM »
You gotta live somewhere. I never thought of my house as primarily an investment. It was primarily a place to live. If it grew in value, great. If it didn't, NBD.

Exactly. And in the end it was all cheaper than renting.
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Scoop Snoop

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Re: House Buying
« Reply #185 on: August 13, 2022, 10:20:58 AM »
The market by us has cooled, but inventory is still quite low. At least buyers generally aren’t going over 20-50K over ask, with waiving inspection…I think buyers have more leverage than they did a few months back, and if houses sit more than 2-3 weeks you’ll see price reductions.

If you are open to the idea of buying an older home that has not been updated in a very long time, you may find a really good deal, even in this market. Many buyers lack the imagination to see beyond dated and often ugly paint colors, wallpaper, flooring, cabinets etc. in older homes. Other buyers simply do not want to deal with major remodeling. It is not for the faint of heart. If you are up to the challenge, the end result after a remodel would be having a home just the way you want it. You mentioned being in a month-to-month rental. You and your family could stick it out 2-3 more months while you remodel or have it done by a contractor. Your kids could decide what they want their rooms to look like. Of course, you would need to act fast to beat out the flippers.
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warriorchick

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Re: House Buying
« Reply #186 on: August 13, 2022, 10:34:20 AM »
If you are open to the idea of buying an older home that has not been updated in a very long time, you may find a really good deal, even in this market. Many buyers lack the imagination to see beyond dated and often ugly paint colors, wallpaper, flooring, cabinets etc. in older homes. Other buyers simply do not want to deal with major remodeling. It is not for the faint of heart. If you are up to the challenge, the end result after a remodel would be having a home just the way you want it. You mentioned being in a month-to-month rental. You and your family could stick it out 2-3 more months while you remodel or have it done by a contractor. Your kids could decide what they want their rooms to look like. Of course, you would need to act fast to beat out the flippers.

If you are going to go this route, you had better be capable of doing a lot of the upgrades yourself, or in a lot of places, be willing to either wait or pay a premium.  Hiring contractors is a bitch right now.  In my area, you can't even get contractors to come out and give a quote.  A neighbor of mine has given up on local companies and is paying a premium to bring in contractors from 100 miles away.
Have some patience, FFS.

Scoop Snoop

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Re: House Buying
« Reply #187 on: August 13, 2022, 11:16:05 AM »
If you are going to go this route, you had better be capable of doing a lot of the upgrades yourself, or in a lot of places, be willing to either wait or pay a premium.  Hiring contractors is a bitch right now.  In my area, you can't even get contractors to come out and give a quote.  A neighbor of mine has given up on local companies and is paying a premium to bring in contractors from 100 miles away.

Fair enough.

Painting is something anyone can do, but some people hate doing it or are sloppy. Flooring is typically installed by the retailer's crew. If you get into electrical, plumbing, HVAC and roofing, major plumbing etc. yeah...a contractor is typically needed. Installing cabinets and light plumbing is not rocket science but some people may not be willing or able to do their own work. The point about finding a contractor is valid though. Finding a really good one is even tougher.

If you can get by with a total repaint and reflooring before moving in and the HVAC, roof, plumbing etc. are OK, and if the kitchen and bath remodels can wait (a big if for many people I would guess) it's still a possibility. One way to repaint so that you can get into the home quickly is to do the walls, ceiling, and the baseboards and crown molding and leave the time-consuming window sashes and trim for later.

Edit: For those old enough to remember the movie "The Money Pit" (with Tom Hanks and Shelly Long) ,,,I loved the scene of the contractor who acted like he was God's gift from heaven and insisted that the prospective client offer him a drink before he would even consider quoting the job. Moments later the contractor storms out of the house and angrily shouts "You gave me the cheap stuff!" Tom Hanks apologizes profusely, convinces the contractor to come back into the house and offers his best whiskey. 
« Last Edit: August 13, 2022, 11:46:33 AM by Scoop Snoop »
Wild horses couldn't drag me into either political party, but for very different reasons.

brewcity77

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Re: House Buying
« Reply #188 on: August 14, 2022, 06:15:29 AM »
I assume you've looked into this, but remember to depreciate your rental property.

https://www.investopedia.com/articles/investing/060815/how-rental-property-depreciation-works.asp

Good stuff. We have a company that does our taxes but I'll make sure to mention it when we send our documents in January.
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brewcity77

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Re: House Buying
« Reply #189 on: August 14, 2022, 06:24:11 AM »
What are the thoughts on waiving the inspection for newer builds?

I wouldn't, just because you don't know the quality of the workmanship put into it. We waived inspection on our 2008 home that was sold (and thus reinspected) in 2018 and we've had a few issues crop up in the first year that an inspection would've caught. Nothing huge, but sump pump issues that led to a replacement, wiring issues that needed an electrician, would've much rather caught those on the front end.

The market is competitive, but I don't think it's so competitive now that I'd waive, even on new construction.
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MU82

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Re: House Buying
« Reply #190 on: August 20, 2022, 08:59:51 AM »
Systemic racism runs through the mortgage and appraisal industries. A very recent example:

In a predominantly white neighborhood in Baltimore, an upper-middle-class Black couple wanted to refinance their home. Their loan application was rejected when their house was valued at $472K by the appraiser chosen by the mortgage company. That was significantly lower than comparable homes -- owned by white people -- in the neighborhood were going for. It stunned the couple, who then decided to conduct an experiment.

Three months later, they removed all traces that a Black family lived there. They took down their family photos and replaced them with photos of a white family, they removed their art and replaced it with artwork from Ikea, etc. On the day of the appraisal, they left the house and a white, male friend greet the appraiser. Otherwise, the couple made no changes or improvements to the home. This time, the house appraised for $750K, more in line with similar homes in the neighborhood.

They have sued both the lender and the appraiser for discrimination.

https://www.nytimes.com/2022/08/18/realestate/housing-discrimination-maryland.html?campaign_id=9&emc=edit_nn_20220820&instance_id=69845&nl=the-morning&regi_id=108420427&segment_id=101940&te=1&user_id=d36dcf821462fdd16ec3636710a855fa
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muwarrior69

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Re: House Buying
« Reply #191 on: August 20, 2022, 01:02:25 PM »
If you are going to go this route, you had better be capable of doing a lot of the upgrades yourself, or in a lot of places, be willing to either wait or pay a premium.  Hiring contractors is a bitch right now.  In my area, you can't even get contractors to come out and give a quote.  A neighbor of mine has given up on local companies and is paying a premium to bring in contractors from 100 miles away.

I got a quote from a local landscaper in March when I put down a small deposit. He just started the project this past week. He told my neighbor he wouldn't be able to start his job until late winter or early spring next year.

TAMU, Knower of Ball

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Re: House Buying
« Reply #192 on: August 20, 2022, 01:15:01 PM »
The house we're renting has an atrocious driveway, it needs to be torn up and repaved. My landlords agreed to do something about it but were having trouble finding someone who could do it for a reasonable price and in a reasonable timeframe. Eventually, they got a referral from their handyman and found a guy who said he could do it for cheap and right away. We told our landlords that this sounded too good to be true. They put 50% down and now it's been three weeks since they were supposed to start and they haven't been able to get ahold of the guy or the handyman who referred them. Now they're out a few thousand and we have to deal with an atrocious driveway
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Re: House Buying
« Reply #193 on: August 21, 2022, 07:03:42 AM »
The house we're renting has an atrocious driveway, it needs to be torn up and repaved. My landlords agreed to do something about it but were having trouble finding someone who could do it for a reasonable price and in a reasonable timeframe. Eventually, they got a referral from their handyman and found a guy who said he could do it for cheap and right away. We told our landlords that this sounded too good to be true. They put 50% down and now it's been three weeks since they were supposed to start and they haven't been able to get ahold of the guy or the handyman who referred them. Now they're out a few thousand and we have to deal with an atrocious driveway

50% down on a driveway replacement, should’ve known right then it was a bad deal.

brewcity77

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Re: House Buying
« Reply #194 on: August 22, 2022, 12:02:17 PM »
The house we're renting has an atrocious driveway, it needs to be torn up and repaved. My landlords agreed to do something about it but were having trouble finding someone who could do it for a reasonable price and in a reasonable timeframe. Eventually, they got a referral from their handyman and found a guy who said he could do it for cheap and right away. We told our landlords that this sounded too good to be true. They put 50% down and now it's been three weeks since they were supposed to start and they haven't been able to get ahold of the guy or the handyman who referred them. Now they're out a few thousand and we have to deal with an atrocious driveway

This is one of the main reasons we're going to use a rental management firm. They have a network of contractors they use normally so if we don't have someone in mind to do the job, they can find someone. Costs a little bit out of pocket, but makes it easy to address that stuff while also handling all the legalese that we aren't expertly versed in.
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Jay Bee

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Re: House Buying
« Reply #195 on: August 22, 2022, 02:36:58 PM »
City of Minneapolis hands out free tents for people to live in. The sh1tters aren’t ideal, but the water bill is also zero
Thanks for ruining summer, Canada.

dgies9156

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Re: House Buying
« Reply #196 on: August 23, 2022, 08:54:24 AM »
We sold our Illinois home yesterday (second sale since April) and now own but one house in Florida. Some thoughts on the sale process:

1) Know your real estate agent well. You are going to have to live with him/her for up to a year. Make sure there is a trust factor. Above all, listen to them on price but verify using Realtor.Com, Zillow.com and Redfin.com.

2) Make sure your buyers understand they're buying a used house. There will be issues. In our case, our Chicago home was 38 years old. The buyer, after a bid was accepted, came back with $13,000 of changes. We said "no" but threw something at them to grease the transaction. In short, we're not paying for your renovations.

3) I hate HGTV. I hate the concept that everyone has to have a white or gray kitchen and I hate the idea that anything not white is garbage. It's a fad and it too will go away, like avocado colored toilets and earth tones.

4) Radon is a scam. Period. End of discussion. Don't trust anyone who uses instrumentation to measure radon. Ask for a calibration report before you allow it into your basement. Remediation is not expensive but a nusiance. Radon is an emotionally charged issue especially for an element that's everywhere.

5) Be realistic about pricing. As a seller, we reached for the stars on the Realtor's private network and when that didn't work, we went for the public market at her recommended price. Our's sold and most of the competition around us is still on the market.

6) Track comparable homes that go on the market when your's does. We had a spreadsheet and tracked days on market for 15 comparable homes in our area, when they reduced price and how we compared on a price per square foot to all our competition. Due it independent of the real estate agent, so you know before he/she recommends a price reduction.

7) Final thought: Because our primary residence is in Florida, we have to pay capital gains on our Illinois sale. Save every receipt you can, just in case. We're not going much, if anything, in capital gains because of that factor. That does not speak well of the Chicago suburban housing market, but it is reality.

brewcity77

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Re: House Buying
« Reply #197 on: August 23, 2022, 09:52:12 AM »
We sold our Illinois home yesterday (second sale since April) and now own but one house in Florida. Some thoughts on the sale process:

1) Know your real estate agent well. You are going to have to live with him/her for up to a year. Make sure there is a trust factor. Above all, listen to them on price but verify using Realtor.Com, Zillow.com and Redfin.com.

2) Make sure your buyers understand they're buying a used house. There will be issues. In our case, our Chicago home was 38 years old. The buyer, after a bid was accepted, came back with $13,000 of changes. We said "no" but threw something at them to grease the transaction. In short, we're not paying for your renovations.

3) I hate HGTV. I hate the concept that everyone has to have a white or gray kitchen and I hate the idea that anything not white is garbage. It's a fad and it too will go away, like avocado colored toilets and earth tones.

4) Radon is a scam. Period. End of discussion. Don't trust anyone who uses instrumentation to measure radon. Ask for a calibration report before you allow it into your basement. Remediation is not expensive but a nusiance. Radon is an emotionally charged issue especially for an element that's everywhere.

5) Be realistic about pricing. As a seller, we reached for the stars on the Realtor's private network and when that didn't work, we went for the public market at her recommended price. Our's sold and most of the competition around us is still on the market.

6) Track comparable homes that go on the market when your's does. We had a spreadsheet and tracked days on market for 15 comparable homes in our area, when they reduced price and how we compared on a price per square foot to all our competition. Due it independent of the real estate agent, so you know before he/she recommends a price reduction.

7) Final thought: Because our primary residence is in Florida, we have to pay capital gains on our Illinois sale. Save every receipt you can, just in case. We're not going much, if anything, in capital gains because of that factor. That does not speak well of the Chicago suburban housing market, but it is reality.

We've gone through three sale processes in the past year. A few thoughts on some of these:

1) Agree. Our agent is a really good buying agent, but we were disappointed with her in the selling process. Unfortunately, we didn't know that ahead of time.

3) Honestly, this goes for pretty much everything. My parents are considering moving back up from Florida but want to get their home "ready" to sell. Don't waste your time. If people want it, if they want the HGTV look, let them do it after they move in. Any last minute changes you make (new carpet, fresh paint, etc) are things they could just as easily do and will cost you more money out of pocket than it will net you in the sale.

4) There's a lot of radon in the midwest, but it's a few hundred dollars for the mitigation system. Suck it up, buttercup. We put in a mitigation system, moved into another property that already had one, and purchased a third that didn't need it.

5) Timing is also key. If you're going on the market or purchasing in March-July, you can expect some inflated prices. Once August/September hit, it's going to slow down and if you want to sell then, you have to adjust accordingly. We were able to catch a lower price on the purchase than comparable properties because we bought in August, but when we finally agreed a sale in December it hurt us on the back end. Had we held out, I'm sure we would've got more for our previous residence.

6) Yes, especially keeping up independent of your realtor. We were checking neighborhood prices on a near daily basis so we could adjust accordingly.
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Scoop Snoop

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Re: House Buying
« Reply #198 on: August 23, 2022, 10:07:08 AM »
We sold our Illinois home yesterday (second sale since April) and now own but one house in Florida. Some thoughts on the sale process:

1) Know your real estate agent well. You are going to have to live with him/her for up to a year. Make sure there is a trust factor. Above all, listen to them on price but verify using Realtor.Com, Zillow.com and Redfin.com.

2) Make sure your buyers understand they're buying a used house. There will be issues. In our case, our Chicago home was 38 years old. The buyer, after a bid was accepted, came back with $13,000 of changes. We said "no" but threw something at them to grease the transaction. In short, we're not paying for your renovations.

3) I hate HGTV. I hate the concept that everyone has to have a white or gray kitchen and I hate the idea that anything not white is garbage. It's a fad and it too will go away, like avocado colored toilets and earth tones.

4) Radon is a scam. Period. End of discussion. Don't trust anyone who uses instrumentation to measure radon. Ask for a calibration report before you allow it into your basement. Remediation is not expensive but a nusiance. Radon is an emotionally charged issue especially for an element that's everywhere.

5) Be realistic about pricing. As a seller, we reached for the stars on the Realtor's private network and when that didn't work, we went for the public market at her recommended price. Our's sold and most of the competition around us is still on the market.

6) Track comparable homes that go on the market when your's does. We had a spreadsheet and tracked days on market for 15 comparable homes in our area, when they reduced price and how we compared on a price per square foot to all our competition. Due it independent of the real estate agent, so you know before he/she recommends a price reduction.

7) Final thought: Because our primary residence is in Florida, we have to pay capital gains on our Illinois sale. Save every receipt you can, just in case. We're not going much, if anything, in capital gains because of that factor. That does not speak well of the Chicago suburban housing market, but it is reality.

Great post dgies. Regarding #2- I think it's much more than the buyers needing to be aware that they are buying an older house. It's a game to see if the sellers are desperate/anxious about closing the deal and, if so, shake them down.

#3 My wife loves those shows and I sometimes watch just to keep her happy, but I agree with you regarding the HGTV remodels. It sets unrealistic design standards and I suspect leads buyers to be super critical and in a negative mood when the homes they tour look nothing like the ones on HGTV.

#5 and 6- Excellent points! Just as in business, you must know your customer and know your market. Ignorance and/or laziness will come back to haunt you.

I was briefly in real estate after I retired and absolutely hated the business, so I left after one year. I thought I would eventually embrace the business, but it simply was never going to happen. The agents who you can trust are few and far between. I heard what they said to their clients on the phone and then what they said to other agents after the call was finished. If your agent knows that you are market savvy and will demand solid answers to your questions, great! The old adage "Trust, but verify" should be front and center.   

 



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dgies9156

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Re: House Buying
« Reply #199 on: August 23, 2022, 10:39:50 AM »
We've gone through three sale processes in the past year. A few thoughts on some of these:

4) There's a lot of radon in the midwest, but it's a few hundred dollars for the mitigation system. Suck it up, buttercup. We put in a mitigation system, moved into another property that already had one, and purchased a third that didn't need it.

Brother Brew:

I respectfully disagree. The mitigation system estimates for our house were $2,000 to $4,000. We got raped 28 years ago on the radon system requirement for our Naperville home and sadly, got raped again here. It's a gigantic fraud and the FTC should investigate.

We compared the radon results from our inspection 28 years ago to those of our buyer. It was complete and total BS. Plus the hour to hour results from the more recent test made absolutely no sense. Sadly, the cat was out of the bag and we had to offer a concession to close the deal.

One other point: Know your buyer's weakness. Our's closed on a house sale the same day and we knew they had no other options. We could be tough because the alternative was no home as thyeir children started school.